GR 184266; (November, 2013) (Digest)
G.R. No. 184266 ; November 11, 2013
Applied Food Ingredients Company, Inc., Petitioner, vs. Commissioner of Internal Revenue, Respondent.
FACTS
Petitioner Applied Food Ingredients Company, Inc., a VAT-registered entity engaged in importation and exportation, filed two separate applications for tax credit certificates in March and June 2002. It sought to recover input VAT amounting to ₱9,528,565.85 paid on importations from September 1998 to December 2000, claiming these were attributable to its zero-rated export sales from April to December 2000. The Commissioner of Internal Revenue did not act on the applications.
Consequently, petitioner filed a judicial claim via a Petition for Review before the Court of Tax Appeals (CTA) on July 24, 2002. The CTA First Division and, subsequently, the CTA En Banc denied the claim. The tax courts ruled that petitioner failed to comply with the mandatory invoicing requirements for zero-rated sales and, more critically, failed to observe the mandatory 120-day waiting period before seeking judicial relief.
ISSUE
Whether or not the petitioner is entitled to the issuance of a tax credit certificate or refund of creditable input taxes attributable to its zero-rated sales.
RULING
The Supreme Court denied the petition. The Court emphasized that claims for tax refunds are construed strictly against the taxpayer, who bears the burden of proving strict compliance with statutory conditions. A fundamental procedural requirement under Section 112(D) of the 1997 National Internal Revenue Code is that a taxpayer must wait for 120 days from the date of filing the administrative claim with the Bureau of Internal Revenue before filing a judicial claim with the CTA.
Petitioner filed its judicial claim on July 24, 2002, which was only 119 days from the filing of its first administrative claim on March 26, 2002, and merely 26 days from its second claim on June 28, 2002. This failure to observe the 120-day mandatory period is fatal, as it deprives the CTA of jurisdiction over the judicial claim. Citing Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc., the Court held that the 120-day period is a mandatory and jurisdictional prerequisite. Since petitioner failed to comply, the CTA correctly dismissed the claim for lack of jurisdiction. The Court found it unnecessary to delve into the substantive issue of compliance with invoicing requirements.